Have An Unpaid Tax Bill? Your US Passport Is In Jeopardy of being Revoked in 2016!

On Tuesday, December 1, 2015 we posted Have An Unpaid Tax Bill? Your Passport Could Soon be Revoked!  where we discussed that a recent bill known as the  H.R. 22, Fixing America’s Surface Transportation Act (FAST Act), which It includes amendments to the tax code that would allow authorities to revoke or deny the passport of any US taxpayer who has unpaid taxes in excess of $50,000 or who have not obtained or won’t provide a Social Security number, has been approve by the conference committee.

The applicable provision in the FAST Act is entitled "Revocation or denial of passport in case of certain unpaid taxes (sec. 52101 of the Senate amendment, sec. 32102 of the House amendment, sec. 32101 of the conference agreement and secs. 6320 and 6331 and new secs. 7345 and 6103(k)(11) of the Internal Revenue Code)" 

Well the highway funding bill was signed by President Obama on December 4, 2015,  which now gives the US government the right to revoke or deny the passports of US persons who owe more than USD50,000 in federal taxes (including penalties and interest). The new provision is expected to become effective on January 1, 2016.

The new law adds a new Internal Revenue Code (section 7345) which authorizes the Treasury Secretary to certify, to the Secretary of State (Secretary), that a taxpayer has a "seriously delinquent tax debt'". A "seriously delinquent tax debt" is greater than USD50,000 and one for which the IRS has either filed a lien or levy. Upon receiving the certificate, the Secretary can deny, revoke, or limit the taxpayer's US passport. The notice must spell out that the taxpayer is entitled to file a lawsuit in the US Tax Court or a federal district court to challenge this certification.

All the existing remedies for addressing an IRS lien or levy continue to apply! Therefore, this new provision of denying a passport will not apply to taxpayers who have entered into installment agreements or offers-in-compromise, or who have requested collection due process hearings or innocent spouse relief.

US citizens living abroad should ensure that their IRS tax affairs are in order before December 31, 2015, in order to ensure that they do not have any issues with their US passport.
 

 Have A Tax Problem?

 Want To Keep Your US Passport?

 

Contact the Tax Lawyers at 

Marini & Associates, P.A.

for a FREE Tax Consultation

at: www.TaxAid.us or www.TaxLaw.ms or

Toll Free at 888-8TaxAid (888)882-9243.

  

 

IRS Tell Estates No Closing Letters - Pull Transcripts Yourself!

The IRS is the federal agency which has the most direct contacts with Americans. Dealing with the IRS is never easy. The starting point is 75,000 pages (in fine print) of the Internal Revenue Code and Regulations which Americans must somehow master to file accurate tax returns.

To make life even more difficult, irrespective of the IRC and Regulations, the IRS creates a number of procedural requirements necessary to complete various tasks involving the IRS' contacts with taxpayers. One such situation involving the filing of Federal Estate Tax Returns (forms 706 and 706-NA) has been the automatic issuance of closing letters (IRS Letter 627, catalogue # 40285J) when the IRS has completed reviewing these forms. Under Section 6324 of the IRC, the IRS has a 10 year lien on all property which appears on an estate tax return. In order to avoid personal liability, the executor of the estate and anyone else who had contact with either the assets or proceeds of the estate (see Section 2203) can be held liable for any unpaid tax unless one receives a form 5173, Federal Transfer Certificate which frees everyone from this potential liability.  Form 5173 was always issued in tandem with with the automatic issuance of the federal closing letter.

This was too simple for taxpayers so the IRS, in its infinite wisdom, decided to make life a little bit more complex with one of its procedural requirements. For estate tax returns filed after June 1, 2015, if the estate wished to receive a closing letter and form 5173, the personal representative or power of attorney had to send a letter to the IRS more than four months after the filing of the tax return requesting the issuance of both the closing letter and form 5173.   

This procedural change unleashed a firestorm of complaints directed toward the IRS. In lieu of going back to the old procedure where a closing letter was automatically issued when the IRS closed an estate, the IRS came up with a completely new procedure which is, leave it to the IRS, even more complex. The new procedure requires the taxpayer to request an account transcript from the IRS Transcript Delivery System. Tax professionals can register with the government to obtain secure tax transcripts; only registered professionals, accompanied by form 2848 (Power Of Attorney) can receive these transcripts. 

This new  methodology will send the tax professional something called a transcript delivery system page, from which one must request a transcript option utilizing this option which can then generate the closing letter. Such a letter cannot be issued until the transcript shows an IRS Transaction Code  421 which indicates that a 706/706-NA has been accepted by the IRS or the the IRS examination is complete. In order to learn more about how to work the system, there is a tutorial program to which one can refer by clicking on "TDS Tutorial." 

This having been said, one wonders about how one gets the required form 5173 (transfer certificate) which is not mentioned in the IRS material. This certainly presents an opportunity to demonstrate how the IRS can create unnecessary complexities (and accompanying misery) for people wishing to receive Federal Closing Letters. Lots of luck!

Have a US Estate Tax Problem?

 

Estate Tax Problems Require

an Experienced Estate Tax Attorney

Contact the Tax Lawyers at

Marini & Associates, P.A.

 for a FREE Tax Consultation Contact US at

www.TaxAid.us or www.TaxLaw.ms

or Toll Free at 888-8TaxAid (888 882-9243).

Robert S. Blumenfeld  - 

 Estate Tax Counsel

Mr. Blumenfeld concentrates his practice in the areas of International Tax and Estate Planning, Probate Law, and Representation of Resident and Non-Resident Aliens before the IRS.

Prior to joining Marini & Associates, P.A., he spent 32 years as the Senior Attorney with the Internal Revenue Service (IRS), Office of Deputy Commissioner, International.

While with the IRS, he examined approximately 2,000 Estate Tax Returns and litigated various international and tax issues associated with these returns.As a result of his experience, he has extensive knowledge of the issues associated with and the preparation of U.S. Estate Tax Returns for Resident and Non-Resident Aliens, Gift Tax Returns, Form 706QDT and Qualified Domestic Trusts.

 

3 International Tax Provision in the Extenders Bill Which is head to President Obama for Signature!

The U.S. House of Representatives agreed to a $622 billion tax package that would extend several expiring tax breaks, including clean energy incentives, and make a number of changes to both individual and corporate taxation, including real estate and medical device taxes.

The bill contains several international tax provisions including:

1. Making permanent the Subpart F exception under Secs. 953(e)(10) and 954(h)(9) for active financing income.
2. A five-year extension, until December 31 2019, of Sec. 954(c)(6), which provides for lookthrough treatment of payments of dividends, interest, rents, and royalties received or accrued from related controlled foreign corporations under the foreign personal holding company rules. and
3. Foreign taxpayers selling a interest in US real property will be subject to a higher 15% withholding tax as opposed to the previous tax of 10%.

On December 18, 2015, the Senate voted 65-33 to pass combined legislation to fund the government and renew or make permanent dozens of expired tax breaks, sending the trillion-dollar legislation to the president.

Need Experienced International Tax Advice?

Contact the Tax Lawyers at 

Marini & Associates, P.A.

for a FREE Tax Consultation

at: www.TaxAid.us or www.TaxLaw.ms or

Toll Free at 888-8TaxAid (888)882-9243.

Sources

Journal of Accountancy

Law360

Have An Unpaid Tax Bill? Your Passport WILL Soon be Revoked!

On Tuesday, December 1, 2015 we posted Have An Unpaid Tax Bill? Your Passport Could Soon be Revoked!, where we discussed that nothing has happen since our May 31, 2012 post "Tax Delinquents May Have Passports Canceled & Be Questioned at Air & Sea Ports"  as it relates to the IRS being able to revoke the passports of Americans who owe substantial unpaid taxes.

However a recent bill known as the  H.R. 22, Fixing America’s Surface Transportation Act (FAST Act), which It includes amendments to the tax code that would allow authorities to revoke or deny the passport of any US taxpayer who has unpaid taxes in excess of $50,000 or who have not obtained or won’t provide a Social Security number, has been approve by the conference committee.

The House and the Senate passed the final version of this highway funding legislation on December 3, 2015 and the bill moves to the president where most believe he is likely sign it into law.

 Have A Tax Problem?

 Want To Keep Your US Passport?

 

Contact the Tax Lawyers at 

Marini & Associates, P.A.

for a FREE Tax Consultation

at: www.TaxAid.us or www.TaxLaw.ms or

Toll Free at 888-8TaxAid (888)882-9243.

  

Its Official - The the 5th Amendment DOES NOT Trump the Required Records Doctrine!

On Tuesday, October 27, 2015, we posted US Supreme Court Asked to Consider Whether the 5th Amendment Trumps the Required Records Doctrine? were we discussed the Third Circuit ruling that a married couple must turn over their foreign bank account records to the Internal Revenue Service, saying the couple can’t shield themselves by asserting their Fifth Amendment right against self-incrimination.

 

This comes after our post "Fifth Amendment Does Not Apply to Offshore Banking Records," where we discuss that under the Required Records Doctrine, and a taxpayer who is the subject of a grand jury investigation into his use of offshore bank accounts cannot invoke the privilege to resist compliance with a subpoena seeking records kept pursuant to the Bank Secrecy Act, the U.S. Court of Appeals for the Seventh Circuit ruled Aug. 27 (In re Special February 2011-1 Grand Jury Subpoena Dated September 12, 2011, 7th Cir., No. 11-3799, 8/27/12). 

 

Now the Supreme Court has declined to review a decision of the Court of Appeals for the Third Circuit which held that the "required records" exception to the Fifth Amendment privilege against self-incrimination applies to allow IRS to summon foreign bank account records. (See Chabot, 577 U.S. 15-454, cert denied 11/30/2015). 

Do You Have Undeclared Income from an Offshore Bank?

Want to Know if the OVDP Program is Right for You?

Contact the Tax Lawyers at 

Marini& Associates, P.A.  

for a FREE Tax Consultation

at: www.TaxAid.us or www.TaxLaw.ms or

Toll Free at 888-8TaxAid (888) 882-9243

Everything You Wanted to Know About Installment Payment Plans, but Wished You Did Not Need to Ask

 

If you're financially unable to pay your tax debt immediately, you can make monthly payments through an installment agreement. As long as you pay your tax debt in full, you can reduce or eliminate your payment of penalties or interest, and avoid the fee associated with setting up the agreement.


Before applying for any payment agreement, you must file all required tax returns.

You may be eligible to apply for a streamline payment agreement if:

• Individuals must owe $50,000 or less in combined individual income tax, penalties and interest, and have filed all required returns.
• Businesses must owe $25,000 or less in payroll taxes and have filed all required returns.

Even if you're ineligible for a Streamline payment agreement, you can still pay in installments

• Complete and Form 9465, Installment Agreement Request and 
• Form 433-F, Collection Information Statement; then contact us for a Free Consultation.

Small Businesses can apply for an in-Business Trust Fund Express installment agreement

Understand your agreement & avoid default

• Your future refunds will be applied to your tax debt until it is paid in full;
• Pay at least your minimum monthly payment when it's due;
• Include your name, address, SSN, daytime phone number, tax year and return type on your payment;
• File all required tax returns on time & pay all taxes in-full and on time (contact us to change your existing agreement if you cannot);
• Make all scheduled payments even if we apply your refund to your account balance; and
• Ensure your statement is sent to the correct address, contact us if you move or complete and mail Form 8822, Change of Address.

If you don't receive your statement, send your payment to the address listed in your agreement.
There may be a reinstatement fee if your agreement goes into default. Penalties and interest continue to accrue until your balance is paid in full. If you are in danger of defaulting on your payment agreement for any reason, contact us immediately. We will generally can stop the IRS from taking enforced collection actions:

• When an installment agreement is being considered;
• While an agreement is in effect;
• For 30 days after a request is rejected, or
• During the period the IRS evaluates an appeal of a rejected or terminated agreement.

Have A Tax Problem?

 

Contact the Tax Lawyers at 

Marini & Associates, P.A.

for a FREE Tax Consultation

at: www.TaxAid.us or www.TaxLaw.ms or

Toll Free at 888-8TaxAid - 888-882-9243.

Have An Unpaid Tax Bill? Your Passport Could Soon be Revoked!

On November 17, 2015 we posted "Tax Delinquents May Have Passports Canceled - Take 2!," where we discussed that nothing has happen since our May 31, 2012 post "Tax Delinquents May Have Passports Canceled & Be Questioned at Air & Sea Ports"  as it relates to the IRS being able to revoke the passports of Americans who owe substantial unpaid taxes.

However a recent bill known as the  H.R. 22, Fixing America’s Surface Transportation Act (FAST Act), which It includes amendments to the tax code that would allow authorities to revoke or deny the passport of any US taxpayer who has unpaid taxes in excess of $50,000 or who have not obtained or won’t provide a Social Security number, has been approve by the conference committee.

The applicable provision in the FAST Act is entitled "Revocation or denial of passport in case of certain unpaid taxes (sec. 52101 of the Senate amendment, sec. 32102 of the House amendment, sec. 32101 of the conference agreement and secs. 6320 and 6331 and new secs. 7345 and 6103(k)(11) of the Internal Revenue Code)" 

This bill will be sent by the Conference Committee back to both the House & the Senate, which must both pass this bill, before it can be sent to the president for signature.

 Have A Tax Problem?

 Want To Keep Your US Passport?

 

Contact the Tax Lawyers at 

Marini & Associates, P.A.

for a FREE Tax Consultation

at: www.TaxAid.us or www.TaxLaw.ms or

Toll Free at 888-8TaxAid (888)882-9243.